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supplies to the sorority and its member chapters, neither the sorority nor its chapters can qualify for exemption as a social club or a civic or social welfare organization. §§1.501(c)(4)-1, 1.501(c)(7)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-360, 1966-2 C.B. 228. 218.506 Nurses’ association; maintaining employment registry. A nurses’ association which maintains an employment registry primarily for the employment of members is not entitled to exemption as a charitable organization or as a business league since its primary purpose is the operation of a regular business of a kind ordinarily carried on for profit and it is engaged in rendering particular services for individual persons rather than promoting the general business conditions of the nursing profession. Rev. Rul. 55-656 distinguished. Distinguished by Rev. Rul. 80-287. §§1.501(c)(3)-1, 1.501(c)(6)-1. (Sec. 501, ’86 Code.) Rev. Rul. 61-170, 1961-2 C.B. 112. 218.507 Nursing bureau. A community nursing bureau operated as a community project, which maintains a nonprofit register of qualified nursing personnel, including graduate nurses, unregistered nursing school graduates, licensed attendants and practical nurses, for the benefit of hospitals, health agencies, doctors and individuals, which receives its primary financial support from various community organizations and public contributions, qualifies for exemption. Distinguished by Rev. Rul. 61-170. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 55-656, 1955-2 C.B. 262. 218.508 Oil production payments acquired with borrowed funds. A nonprofit organization may qualify for exemption from tax where it obtains funds for charitable grants and contributions through acquisition, with borrowed money, of oil and gas production payments. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-296, 1966-2 C.B. 215. 218.509 Pension to retired employees. An organization created pursuant to the will of a stockholder of a company to pay pensions to all retired employees of that company does not qualify for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 68-422, 1968-2 C.B. 207. 218.510 Police-firemen’s benefit association. A corporation organized and operated exclusively for the benefit of dependent widows and children of policemen or firemen killed in the line of duty may, under certain circumstances, qualify for exemption as a charitable organization. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 55-406, 1955-1 C.B. 73. 218.511 Political; separate bank account. A separate bank account used by a candidate for state public office to receive deposits of political campaign funds that are disbursed only for bona fide political campaign expenses qualifies as a political organization under section 527. (Sec. 527, ’86 Code.) Rev. Rul. 79-11, 1979-1 C.B. 207. 218.512 Political activities; assisting in transition of office of Governor. A nonprofit organization formed to implement an orderly change of administration of the office of Governor of a State by assisting the Governor-elect, during the period between his election and inauguration in screening and selecting applicants for State appointive offices and preparing a legislative message and program reflecting the party’s platform and budget, is an “action” organization, and does not qualify for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 74-117, 1974-1 C.B. 128. 218.513 Political activities; newsletter publication; congressional voting records. Certain publications in a nonpartisan newsletter of congressional incumbents’ voting records on selected issues do not constitute participation or intervention in any political campaign. Rev. Rul. 78–248 amplified. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 80-282, 1980-2 C.B. 178. 218.514 Political campaign practices. An organization formed to elevate the standards of ethics and morality in the conduct of political campaigns that disseminates information concerning general campaign practices, furnishes teaching aids to political science and civics teachers, and publicizes its proposed code of fair campaign practices without soliciting the signing or endorsement of the code by candidates qualifies as an educational organization. Rev. Ruls. 60-193 modified and 66-258 superseded. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 76-456, 1976-2 C.B. 151. 218.515 Political education organization. A corporation created to encourage greater participation in government and political affairs through the use of seminars, non-partisan workshops, and through the distribution of educational materials does not qualify for exemption as an educational organization but may qualify as a social welfare organization. Modified by Rev. Rul. 76-456. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 60-193, 1960-1 C.B. 195. 218.516 Political education organization. An organization which, as its primary objective, advocates the adoption of a doctrine or theory which can become effective only by the enactment of legislation is not entitled to exemption since it is an “action” organization and thus is not operated exclusively for educational purposes. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 62-71, 1962-1 C.B. 85. 218.517 Premiums paid on assigned life insurance policy. A section 501(c)(3) organization will not lose its exempt status if it accepts, and pays premiums on an assigned life insurance policy in which the assignor retains the right to select the method of payment of the proceeds due upon his death. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 67-381, 1967-2 C.B. 189. 218.518 Preservation of buildings having historical or architectural significance. A nonprofit organization formed to promote an appreciation of history through the acquisition, restoration, and preservation of homes, churches, and public buildings having special historical or architectural significance and to open the structures for viewing by the general public qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 75-470, 1975-2 C.B. 207. 218.519 Preservation of properties having historical or architectural significance. An organization formed for the purposes of preserving the historic or architectural character of a community through the acquisition and occasional restoration of historically or architecturally significant properties, and subsequent disposition of these properties qualifies for exemption under section 501(c)(3). §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 86-49, 1986-1 C.B. 243. 218.520 Prevention of cruelty to animals; birth control. A nonprofit organization formed to prevent the overbreeding of cats and dogs by providing funds to pet owners who wish to have their pets spayed or neutered but cannot afford the cost of such operations qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 74-194, 1974-1 C.B. 129. Exempt organizations 218.521 Prevention of cruelty to animals; legislative activities. An organization operated for the prevention of cruelty to animals, exempt under section 501(c)(4), is not exempt under section 501(c)(3) if it substantially engages in promoting legislation for the humane treatment of animals, even though the legislation it advocates may be beneficial to the community, and even though most of its attempts to influence legislation may be indirect. Contributions to it are not deductible. §§1.170-2, 1.501(c)(3)-1, 1.501(c)(4)-1. (Secs. 170, 501; ’86 Code.) Rev. Rul. 67–293, 1967–2 C.B. 185. 218.522 Prevention of cruelty to children. An organization formed and operated for the purpose of preventing children from working in hazardous trades or occupations in violation of state laws, to protect children, and eliminate conditions detrimental to them, the income of which is derived from contributions solicited from the public through various agencies, is exempt from tax. I.T. 2143 superseded. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 67-151, 1967-1 C.B. 134. 218.523 Private club operated by motel. A private club, controlled by the owners of an adjoining motel, which provides entertainment and operates a cocktail lounge as an integral part of the motel business does not qualify for exemption as a social club. §1.501(c)(7)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-225, 1966–2 C.B. 227. 218.524 Private foundation; governing instrument provision; dissolution requirements. Provisions in an organization’s governing instrument that satisfy the requirements of section 508(e), for purposes of qualification for exemption under section 501(a) as a private foundation, are not in themselves sufficient to meet the requirement of reg. 1.501(c)(3)-1(b)(4), that upon dissolution, the organization’s assets be dedicated to an exempt purpose. §§1.501(c)(3)-1, 1.508-3, 53.4947-1. (Secs. 501, 508, 4947; ’86 Code.) Rev. Rul. 85-160, 1985-2 C.B. 162. 218.525 Private hospital rooms. An otherwise qualifying organization that makes a private hospital room available to patients who can benefit medically from a private room but who cannot afford the expense of such a room is operated exclusively for charitable purposes and is exempt from tax. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 79-358, 1979-2 C.B. 225. 218.526 Private school; racially discriminatory. Private schools that practice racial discrimination do not qualify as tax-exempt organizations under section 501(c)(3). Contributions to such schools are not deductible under section 170. (Secs. 170, 501; ’86 Code.) Bob Jones University, 461 U. S., Ct. D. 2018, 1983–28 I.R.B. 8. 218.527 Private schools; racially discriminatory. Respondents lack standing to bring suit charging the federal tax exemption granted to racially discriminatory private schools in their communities impairs their ability to have their public schools desecrated. (Sec. 501, ’86 Code.) Allen v. Wright, 468 U. S., Ct. D. 2027, 1984-2 C.B. 106. 218.528 Private school; racially nondiscriminatory policy. A private school that does not have a racially nondiscriminatory policy as to students does not qualify for exemption. §§1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 71-447, 1971-2 C.B. 230. 218.529 Professional standards review. An organization was established to perform the services of a professional standards review organization (PSRO) pursuant to section 249F of the Social Security Amendments of 1972, and was desig-
Exempt organizations nated as a PSRO for a particular area by the Department of Health and Human Services (HHS). It derives all of its support from contracts with HHS which provide for payment for all reasonable and necessary expenses incurred by it in the performance of its functions. The organization qualifies for exemption under section 501(c)(3) of the Code and is not a private foundation under section 509(a) because it is described in section 170(b)(1)(A)(vi). Rev. Rul. 74–553 distinguished. §§1.170A-9, 1.501(c)(3)-1, 1.509(a)-2. (Secs. 170, 501, 509; ’86 Code.) Rev. Rul. 81–276, 1981–2 C.B. 128. 218.530 Promoting circulation of founder’s books. An organization whose primary purpose is to promote the circulation of books of one of its incorporators and whose activities consist of purchasing such works and making them available for public use is not organized and operated exclusively for educational purposes. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 55-231, 1955-1 C.B. 72. 218.531 Property purchased in “bargainsale” transaction. A charitable organization’s exemption from tax will not be affected by purchasing securities from its creator (and sole trustee) at the price he paid for them and reselling them at a profit. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 69-39, 1969-1 C.B. 148. 218.532 Public forums; congressional candidates. The conduct of public forums involving qualified congressional candidates in the manner described by an organization otherwise exempt under section 501(c)(3), will not constitute participation or intervention in any political campaign within the meaning of section 501(c)(3). Rev. Rul. 66-256 amplified. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 86-95, 1986-2 C.B. 73. 218.533 Public forums on national and community interests. A nonprofit organization formed to conduct public forums at which lectures and debates on social, political, and international matters are presented qualifies for exemption even though some of its programs include controversial speakers or subjects. I.T. 1224 superseded. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-256, 1966-2 C.B. 210. 218.534 Public interest law firms. This procedure sets forth guidelines for public interest law firms, including procedures under which a public interest law firm may accept fees for its service. Rev. Rul. 75–75 revoked; Rev. Rul. 75–76 amplified; Rev. Proc. 71–39 superseded; and Rev. Proc. 75-13 modified and superseded. §1.501(c)(3)-1. (Sec. 601.201, S.P.R.; Sec. 501, ’86 Code.) Rev. Proc. 92–59, 1992-2 C.B. 411. 218.535 Public park maintenance. A nonprofit organization with membership open to the general public that was formed by residents of a city to help preserve, beautify, and maintain a public park located in the city and whose support is derived from membership dues and contributions from the general public is operated exclusively for charitable purposes. Rev. Rul. 75–286 distinguished. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 78–85, 1978-1 C.B. 150. 218.536 Public recreation facilities. A nonprofit corporation organized to establish, maintain, and operate a public swimming pool, playground and other recreation facilities for community residents is tax-exempt and contributions there to are deductible as charitable contributions. §1.501(c)(3)-1. (Sec. 23(o), ’39 Code; Secs. 170, 501, ’86 Code.) Rev. Rul. 59–310, 1959–2 C.B. 146; Isabel Peters, 21 T.C. 55, Acq., 1959-2 C.B. 6. 218.537 Publication; discrediting persons or institutions. An organization does not qualify for exemption where a substantial part of its activities is the distribution of publications that seek to discredit particular institutions and individuals on the basis of unsupported opinions and incomplete information about their affiliations and activities. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 68–263, 1968-1 C.B. 256. 218.538 Publication; ethnic newspaper. A nonprofit organization, whose only activities are preparing and publishing a newspaper of local, national, and international news articles with an ethnic emphasis, soliciting advertising and selling subscriptions to that newspaper in a manner indistinguishable from ordinary commercial publishing practices, is not operated exclusively for charitable and educational purposes and does not qualify for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 77-4, 1977-1 C.B. 141. 218.539 Publishing library classification system; corporation. A corporation, organized under an unrestricted charter to edit and publish a library classification system, distributed all its stock to the foundation that had previously handled the system. Dividends paid the foundation were expended as awards in recognition of outstanding library contributions. Held, the corporation was operated for educational purposes and was entitled to tax exemption. (Sec. 101(6), ’39 Code; Sec. 501, ’86 Code.) Forest Press, Inc., 22 T.C. 265, Acq., 1954-2 C.B. 4. 218.540 Publishing teaching materials and textbooks. A nonprofit organization which makes funds available to authors and editors for preparing teaching materials and writing textbooks, and, under the terms of the contract with the publisher, receives royalties from sales of the published materials and then shares them with the editors and authors, does not qualify for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-104, 1966-1 C.B. 135. 218.541 Radio system maintained. A nonprofit association which provides and maintains a two-way radio system on a mutual or cooperative basis qualifies for exemption provided that 85 percent or more of its income consists of amounts collected from members for the sole purpose of meeting losses and expenses. §1.501(c)(12)-1. (Sec. 501, ’86 Code.) Rev. Rul. 57-420, 1957-2 C.B. 308. 218.542 Real estate boards; multiple listing service. A real estate board whose primary purpose or activity is the operation of a multiple listing service for its members does not qualify for exemption. §1.501(c)(6)–1. (Sec. 501, ’86 Code.) Rev. Rul. 59–234, 1959-2 C.B. 149. 218.543 Receipt and payment of employment taxes owed by creators. An organization established pursuant to a collective bargaining agreement between an association of manufacturers and a labor union in order to receive and pay over employment taxes which the manufacturers are required to deduct from the wages of employees who are members of the union does not qualify for exemption. §§1.501(a)-1, 1.501(c)(4)-1, 1.501(c)(5)-1, 1.501(c)(6)-1. (Sec. 501, ’86 Code.) Rev. Rul. 66-354, 1966-2 C.B. 207. 218.544 Recreational facility; preserving and improving lake. A nonprofit organization formed to preserve and improve a lake that is used extensively as a public recreational facility qualifies for exemption. §1.501(c)(3)–1. (Sec. 501, ’86 Code.) Rev. Rul. 70-186, 1970-1 C.B. 128. 218.545 Recreational facility; restricted use. The Service will not follow the Eden Hall Farm decision, which held that an organization providing recreational facilities for employees of selected corporations qualifies as a social welfare organization under section 501(c)(4). §1.501(c)(4)-1. (Sec. 501, ’86 Code.) Rev. Rul. 80-205, 1980-2 C.B. 184. 218.546 Rehabilitating ex-convicts and parolees. A nonprofit organization which furthers the rehabilitation of ex-convicts and parolees in order to make them self-supporting and useful citizens may be exempt from tax. I.T. 2088 superseded. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 67-150, 1967-1 C.B. 133. 218.547 Rehabilitation of alcoholics. A halfway house, organized to provide room, board, therapy, and counseling for persons discharged from alcoholic treatment centers, which also operates a furniture shop to provide full-time employment for its residents with any profits applied to operating costs of the halfway house, qualifies for exemption and is not conducting an unrelated trade or business. §§1.501(c)(3)-1, 1.513-1. (Secs. 501, 513; ’86 Code.) Rev. Rul. 75-472, 1975-2 C.B. 208. 218.548 Rehabilitation of prisoners. A nonprofit organization formed to develop and manage community correctional centers for the rehabilitation of prisoners in cooperation with the coourts and government custodial agencies qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 70-583, 1970–2 C.B. 114. 218.549 Rehabilitation program; former mental patients. An organization providing a residence facility and therapeutic “group living program” for individuals recently released from a mental institution qualifies for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 72–16, 1972–1 C.B. 143. 218.550 Religious; broadcasting station. A nonprofit religious broadcasting station that does not sell commercial or advertising time is exempt even though it operates on a commercial license. Amplified-by Rev. Rul. 78-385. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 68-563, 1968-2 C.B. 212. 218.551 Religious; burial services. An otherwise qualifying organization whose purpose is to provide traditional burial services that directly support and maintain basic tenets and beliefs of a religion regarding burial of its members is operated exclusively for charitable purposes and is exempt from tax. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 79–359, 1979-2 C.B. 226. 218.552 Religious; educational tours. A nonprofit organization that arranges and conducts winter-time ocean cruises during which activities to further religious and educational purposes are provided in addition to extensive social and recreational activities is not operated exclusively for exempt purposes and does not qualify for exemption. §1.501(c)(3)-1. (Sec. 501, ’86 Code.) Rev. Rul. 77-366, 1977-2 C.B. 192. 218.553 Religious; operating businesses. Through subsidiary organizations, a church owned and managed the personal, real, and business properties of its members. Held, business activities were conducted as training projects for student ministers to illustrate the church’s concept of religious precepts applicable to daily business activities and the organizations are exempt. (Sec. 501, ’86 Code.) Golden Rule Church Assn., 41 T.C. 719, Nonacq., 1964-2 C.B. 8. 218.554 Religious; supervision and inspection of commercially prepared food products. A
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